ANNOUNCEMENT 25 Nov 2014

In November 2014, the government of Nigeria announced the devaluation of its national currency.

NUMBER OF INTERVENTIONS

1

  • 1 harmful
  • 0 neutral
  • 0 liberalising

SOURCE



William Wallis and Javier Blas, 25 November 2014, 'Nigeria devalues currency as oil prices drop', Financial Times: http://www.ft.com/cms/s/0/30d5ba9e-749b-11e4-8321-00144feabdc0.html#axzz3kNYd4rfC

Javier Blas, 7 November 2014, 'Nigeria's currency - calm now, devaluation later? ' Financial Times blog, http://blogs.ft.com/beyond-brics/2014/11/07/nigerias-currency-calm-now-devaluation-later/

Godwin Emefiele, general remarks of CBN governor delivered at Annual Bankers' Dinner held on 5 December 2014 at Lagos, Nigeria: http://www.cibng.org/admin/speech/68506115536377.pdf

http://www.businessnewsreport.com.ng/cbn-devalues-the-naira-n168-to-dollar/


Inception date: 25 Nov 2014 | Removal date: open ended

Competitive devaluation

On 25 November 2014, the Central Bank of Nigeria (CBN) devalued the Naira by nearly 10 per cent and increased its interest rate from 12 to 13 per cent. The measure should counter the effect of falling oil prices as well as foreign investors selling Nigerian securities, i.e., shrinking foreign exchange accounts.
 
Several news sources reported the central bank governor saying: 'The depreciation at both the interbank and the BDC segments largelyreflected recent demand pressures arising from the falling oil pricesand dwindling external reserves. As part of the demand managementmeasures, the Bank in two recent circulars excluded certain import itemsfrom the rDAS window. Despite the tight measures, the high demand for foreign exchange hascontinued unabated, This demand does not seem to have any bearing on thegenuine foreign exchange needs of the country, which the Bank standsready and has the capacity to meet. The current level of externalreserves provides approximately 7 months of imports cover."
 
After the Presidential elections in February 2015, the CBN devalued the Naira again. Please, consult measure no. 9708under Related Measures.

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